Indian cardiac stents as expensive as imports: MNC association

NEW DELHI: Corporate hospital chains in search of profits might be skewing the price of life saving cardiac stents and a lobby group for multinational stent makers and importers claimed stents made by Indian companies are priced as high as imported ones as the rift between MNC and domestic manufacturers widens over price control on stents.

Cardiac stents are tiny wire mesh tubes used to unblock and keep arteries open, supplying blood to the heart and prevent heart attacks. India’s drug pricing watchdog, National Pharmaceutical Pricing Authority (NPPA), is working out a formula to regulate prices of different cardiac stents and has invited stakeholders for discussions and suggestions.NPPA is expected to cap the prices by mid-February, as per rules of the Drug (Prices Control) Order 2013.

Contrary to public opinion, Indian stents are not drastically cheaper to imported stents, says the Medical Technology Association of India (MTaI) — a lobby group of research-based multinational medical device makers including Abbott, Medtronic and Boston Scientific.

“Domestic and imported stents have similar price ranges because costs borne by domestic and global manufacturers are similar, including investment in training doctors to use these devices,” said Probir Das, Director MTaI. Neither multinationals nor domestic companies are engaged in price gorging, but their operating realities have to be taken into account, Das said.

Several distributors ET spoke to say most indigenous drug-eluting stents (DES) today have a maximum retail price (MRP) of at least Rs 1.30 lakh. Distributors and domestic industry insiders said Indian companies have even fixed MRPs of newly introduced Drug Eluding Stents (DES) at more than Rs 1.50 lakh—a similar price range to the latest stents by top global stent companies like Medtronic and Abbott India.

However, Indian companies differ with MNCs here and claim that save for newer launches, most locally produced stents are cheaper than imported stents. “When MNC product prices shoot up, Indian manufacturers are forced to create alternative brands with similarly high MRPs to retain customers or to see that their market share doesn't get battered,” said Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD)—a lobby group for domestic medical device companies.

“But this creates artificial inflation and the government needs to step in with a price capping mechanism or tax-based disincentive.”

“Our MRPs have been 20-30% lower than MNC brands,” said an executive of leading indigenous stent manufacturer who wished to remain unidentified. Higher MRPs are fixed to compete with imported stent prices and are more to satisfy hospitals seeking better margins than anything else, say domestic stent makers.

Corporate hospitals mark DES prices up anywhere between 60% and 100% depending on how far they can beat down MRP from distributors to cover operating costs and make profits, another domestic industry insider said on condition of anonymity.

According to this official, manufacturers provide the stent to distributors at a margin of 35-40%, while distributors add a margin of at least 20% when supplying to hospitals. Depending on the price they buy the stent for, hospitals on an average make 40% profit when selling to patients, the official added.

“Today, major hospitals ask for the MRP of the stent first before they go in for any negotiation,” an indigenous industry official said.